Each grantee awarded a capital
development grant shall ensure that the requirements of this section are
(1) In all its contracts or
subcontracts for services and materials to be paid for with grant proceeds;
(2) By all its contractors
and/or subcontractors providing or contracting for services and/or materials to
be paid for with grant proceeds.
Prior to the disbursement of grant funds
for any contract for services or materials required for eligible activities
under a capital development grant, all construction or service contractors or
subcontractors shall provide evidence satisfactory to the Department, of
compliance with the requirements of this section.
(1) The grantee shall provide to the
Department copies of the proposals from consultants and/or contractors for the
Department's review and approval.
(2) The Department's review and approval
shall be based on the proposed budget, the applicant's experience, the price of
the services, and related factors, and shall be completed within 15 days of
receipt of complete information from the grantee.
(c) No contract or subcontract using EHAP
funds in excess of $25,000 shall be awarded without the prior review of the
Department and without written approval from the Department. The Department
shall not unreasonably withhold approval of said contracts.
Each grantee entering into contracts for
construction or rehabilitation services or materials shall have:
(1) Written bidding procedures and shall have
invited bids from as many prospective bidders as is practical;
(2) Awarded the contract to the lowest
responsible bidder or shall have rejected all bids;
(3) Established a method of monitoring the
(4) Maintained and
make available to the Department detailed records and accounts of contracts for
services and or the purchase of materials.
(e) Each contract for construction or
rehabilitation services or materials shall comply with all applicable program
requirements and all applicable terms and provisions of the standard
(f) Each contract shall
include a provision stating that the records of the contracting parties shall
be subject to audit by the Department for a period of five years after the
termination of the Standard Agreement.
(g) Each contract shall include a provision
stating the method and schedule of payments and shall provide for the retention
of an amount of not less than ten percent from each progress payment, until
such time as the lien-free completion of the project is ensured.
Each construction or rehabilitation
contract of $25,000 or more shall include a security provision requiring the
contractor to provide a performance and payment bond or an alternate, yet
equivalent, form of security, such as a letter of credit.
(1) Any form of security, required of such a
contractor and/or a subcontractor, other than a performance and payment bond,
is subject to the prior review and approval of the Department.
(2) The security shall be in an amount equal
to one-hundred percent of the amount of the successful bid.
(i) Each construction or service
contractor or subcontractor shall be appropriately licensed by the California
State Contractors Licensing Board and shall be insured as required by State
The grantee shall
establish procedures which ensure that disbursements are properly expended by,
or on behalf of, the grantee. Such procedures shall include:
(1) Performing on-site inspections of the
construction or rehabilitation work; and
(2) Using progress inspection reports as the
basis for issuing payments to contractors or subcontractors.